Europe's hottest startup capitals: Paris

This article was taken from the September 2011 issue of
Wired magazine. Be the first to read Wired's articles in print
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London's startup scene is booming -- you need only read Wired to
see that. But what are Europe's other hot digital cities -- and
which are the companies and founders to watch? Welcome to Wired's
first annual guide to the continent's rising stars.

PARIS

With venture capital now more accessible, the Parisian digital
ecosystem is thriving. La Nouvelle Vague of business has
arrived.

In December 2008, during the final session at the LeWeb
conference in Paris, organiser Loïc
Le Meur and an American panel that included TechCrunch founder Michael Arrington engaged in a debate about
how European startups compare to those in Silicon Valley. Le Meur
argued that it was hard for successful French startups to move
beyond national borders. To prove his point, he asked the others if
they had ever heard of Vente-Privee. None had.

Widely acknowledged as the precursor of the "flash sales" model
adopted by Gilt Groupe and, to some extent, Groupon,
Vente-Privee has 13 million members (four times as many as Gilt), a
portfolio of some 1,200 designer brands and about $1.5 billion
(£900 million) in annual sales. In May, it said it would finally
enter the US market in a joint venture with American Express.

In Paris, Vente-Privee is part of a group of companies that came
to the fore after the dotcom bust of 2000. Others include
meetic.com -- its 30 million subscribers make it the most popular
dating site in Europe -- and shopping site PriceMinister, which was
acquired by Japanese ecommerce giant Rakuten for €200m last
year.

The explosive growth of these companies reflects a Parisian
digital ecosystem that, according to Colette Ballou, who has worked
with many Parisian startups as CEO of PR firm Ballou, "went from
nothing to a powerhouse in about eight years".

"In 2001, we made the move into ecommerce, long before Groupon,"
says Jacques-Antoine Granjon, founder of Vente-Privee. "I know
nothing about IT, but to a lot of people my story meant that you
could start small and be a success." And finance is becoming more
accessible. In 2010, meetic.com founder Marc Simoncini started
Jaina Capital, a €100m seed-capital fund. Similarly, Xavier Niel,
the founder of French internet service provider Free/Illiad, valued
at almost €5bn, cofounded KIMA Ventures -- a seed fund which
invests on average in two startups a week -- with entrepreneur
Jeremie Berrebi.

"We always had entrepreneurs, but France was lagging behind in
terms of venture capital," says Pierre Kosciusko-Morizet, one of
the founders of PriceMinister and a cofounder of ISAI, a Parisian
fund that regularly invests €500,000 to €1.5m in early-stage
internet companies. "That has changed a lot in past three
years."

Further evidence of maturity in the marketplace are events like
LeWeb -- the annual conference started by Le Meur in 2004 -- and
the creation of tech incubators like Le Camping, where over 40
experienced entrepreneurs mentor 12 startups for six months.

"In the past ten years, the local ecosystem has changed a lot,"
says Rodrigo Sepúlveda Schulz (right), a serial entrepreneur and
investor in both Paris and Silicon Valley. "We have founders and
engineers who have worked for two or three startups and have
learned the culture."

But, for all the venture capital, entrepreneurial culture and
digital infrastructure, some founders are concerned that the French
mindset remains risk-adverse.

Tariq Krim, founder of Netvibes and Jolicloud, says: "Few VCs
are product-focused and only care about revenue and a quick exit.
We still need VCs who will tell entrepreneurs [that they want them
to] disrupt the whole industry and build the next Groupon, the next
Foursquare, the next Facebook."

Comments

Kima Ventures, though based in Paris and managed by Jeremie from Tel Aviv, funded our company 24PageBooks, located in Rochester, NY. I think this global perspective is the key to European and other non-US start-ups breaking into our (US) awareness. Borders don't mean a lot when you're a digital business...

Martin Edic

Aug 24th 2011

What a bullshit review

Augure

Aug 25th 2011

In reply to Augure

You forgot to mention which not-included startup you are from, silly.

Dave

Aug 25th 2011

In reply to Augure

By criticizing without motivating your point of view your giving big clues about the calibre of your opinion